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January 22, 2015, 11:18 P.M. ET

DAVOS: Soros Gives His Backing to Euro Zone Quantitative Easing

By Jonathan Buck

George Soros gave his support to the European Central Bank’s quantitative easing that was unveiled Thursday.

Financier and philanthropist Soros described the one-trillion-euro ($1.14 trillion) stimulus as “overwhelming” and “a very powerful set of measures,” adding: “I think it exceeded the very high expectations of the market.”

At a dinner on the sidelines of the annual meeting of the World Economic Forum in Davos, Switzerland, Soros lamented the absence of fiscal stimulus in the euro zone to accompany the easing monetary policy. “It is unfortunate that the burden falls on the central bank,” he said.

He cautioned that the exclusive reliance on monetary policy would increase the inequality between the rich and poor nations and peoples.

Nonetheless, he believes the ECB’s actions will help to revive the faltering euro-zone economy. “It is late, but I think it will be effective,” he said.

Soros also called the Swiss National Bank’s decision last week to abandon its three-year-old policy of defending a floor for the euro against the Swiss franc as inevitable.

The flow of money from the euro to the Swiss franc had become irresistible, prompting the Swiss central bank to act.

“In retrospect, it was inevitable,” Soros said.

Aged 84 and no longer actively managing his wealth, Soros is admired and his opinion carries influence. About 150 journalists turned out to hear him speak Thursday.

In prepared remarks, he talked about Russia and Ukraine, and the “disintegrating, deflationary and depressed European Union.”

He drew comparisons to the situation in Europe in 1989.

“Then, the Soviet empire was disintegrating and the integration of the European Union was at its peak,” he said. “Now, Russia is resurgent and the European Union is disintegrating. This gives the new Ukraine a pivotal role. How it stands up to Russian aggression will determine not only the fate of Ukraine but also of the European Union.”

Conflict in Eastern Europe makes for a difficult climate for investment.

“The heightened uncertainty and volatility makes me less bullish than the markets because they militate against risk taking and reinforce the lack of investment demand,” he said.

About Davos Report

The World Economic Forum’s annual meeting in Davos, Switzerland, attracts 1,500 corporate leaders. On the sidelines of the meeting, we talk to executives to learn about business trends and strategic developments.

The blog is written by Barron’s Europe Editor Jonathan Buck, who previously worked for The Wall Street Journal and its international editions. He has attended the World Economic Forum’s annual meeting each year since 2011.